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Stimulus Package

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Maybe it's the White House press secretary that's smoking the "heavy stuff."

Robert Gibbs tried to walk back comments Tuesday that liberal critics of President Barack Obama "ought to be drug tested." In a statement, Gibbs called the comments "inartful" but didn't offer a full-throated apology to what he called the "professional left."

Tuesday night, liberal filmmaker Michael Moore told MSNBC host Keith Olbermann that Gibbs had made the wrong assumption about liberals. "I've never heard the left referred to with the word 'professional,'" said Moore. "It implies that we're organized."

"When Mr. Gibbs is worried about what people on the left are smoking, from my experience the person in the room who's most paranoid about who's smoking what is usually the person smoking the really heavy stuff," noted Moore.

The filmmaker believes that what's bothering Gibbs is that liberals have been right from the beginning that the White House was making too many concessions to conservatives.

"From the beginning of this administration, what did people on our side of the fence say? You should take over these banks temporarily and fire all the thieves who stole our money. But instead what did they do? They enabled them," explained Moore.

"They called for more offshore oil drilling. They expanded the war in Afghanistan. The stimulus package, they caved into the Republicans," he continued.

"Everything that we've been trying to push them to do has now come back to bite them in a profound way to the point where they're very frightened, as they should be, about the election in a couple of months," Moore said.

"To go after your core base, I mean the people that are really -- the ones that go out and carry the water for you, to do the hard work, it's like -- I mean this is the guy, Gibbs, you don't want him like drafting the fund-raising letter for the next election cycle. It will begin something like 'Dear biggest Obama supporters, you suck. Now send us money, please.' It's just like it's totally crazy," he said.



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George Will apparently took the holiday weekend off from his regular appearances on the roundtable on This Week, but GOP flack Dan Senor did his best to make up for his absence. After what was otherwise a fairly rational discussion on the jobless recovery, the fact that the stimulus wasn't large enough to get the economy back on track and whether doing anything more is possible politically given the Republicans don't even want to allow for unemployment benefits to be extended, Senor claims that the debt burden and fear of taxes being raised is the reason the unemployment numbers are terrible. Thankfully, Paul Krugman was there to beat back Senor's nonsense.

SENOR: He didn't send a mixed message. He actually was very clear. If the Congress didn't pass the stimulus, unemployment would rise about 8 percent. If they passed the stimulus, it would stay below 8 percent. His problem is being held accountable to what he said would occur if his bill -- if his stimulus package was passed.

And now he's saying, well, it could have been this -- unemployment could have been 13 percent, 14 percent or 15 percent, what he said in Wisconsin last week. The reality is, you may be right that the crushing effects of the debt burden won't be felt for some time, but it is having an effect on investors and lenders and employers today.

People know this -- this debt and deficit burden is unsustainable without major tax increases in the future. Major tax increases and the uncertainty that's associated with them makes it very hard for the private-sector economy to engage. And that's who's on the sidelines right now.

KRUGMAN: I just want to say, that's a -- there is not a hint of what you're saying in the data, not a hint that the debt burden is what's discouraging -- businesses aren't investing because they have massive excess capacity.

I trust Senor's advice on economic policy about as much as I'd trust him to tell the truth about why we invaded Iraq. Krugman had a much longer spot on GPS this Sunday as well. I wish to hell the administration would start listening to him and quit with the deficit fear mongering by expecting anyone to take this "bipartisan" commission seriously as anything other than an excuse to trash our social safety nets. They do nothing but give hacks like Senor and the rest of the deficit hawks credibility.

I'm also sick to death about this conversation never including our tax policies which actually encourage businesses to take jobs overseas and our trade laws. It's time for our government to start representing the interests of the workers of this country and not just multi-national corporations that would be happy if all of us were working for slave wages while CEO's and Wall Street investors maximize their profits. As I've said before, this is class warfare and the workers and what's left of the middle class are losing it. I'm happy that we've at least got the Paul Krugman's of the world talking about how wrong-headed those policies are that manages to get some air time on our corporate media. Sadly voices like his are too few and too far between.

Full transcript via ABC News below the fold.

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Chickenhawks Cheney and Kristol Play Deficit Hawks

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Chickenhawk Cheney Mini-Me Liz and her buddy Bloody I'm-never-right-about-anything-Bill Kristol are asked about the jobs and stimulus package that was blocked in the Senate when Joe Lieberman and Ben Nelson voted with the Republicans to kill it. Of course Cheney and Kristol use the opportunity to fear monger over the deficit and to repeat the lie that Americans' primary concern is the size of the debt rather than the economy and jobs.

As Juan Williams correctly tried to point out, that is not what most Americans are concerned about. Digby has more on how these deficit fetishists in our print media and not just Fox are pushing the same meme.

Replaying the game of 2003:

Ben Somberg catches the Washington Post publishing lazy, nonfactual reporting. Again:

If Congress doesn't provide additional stimulus spending, economists inside and outside the administration warn that the nation risks a prolonged period of high unemployment or, more frightening, a descent back into recession. But a competing threat -- the exploding federal budget deficit -- seems to be resonating more powerfully in Congress and among voters.

Somberg writes:

[I]s this notion supported by what the polling actually says? No. Not even close.

A Pew Research / National Journal poll from early June asked "Which of the following national economic issues worries you most?" Number one was "job situation" with 41%. "Federal budget deficit" got 23%.

An NBC / Wall Street Journal poll from early May asked "Please tell me which one of these items you think should be the top priority for the federal government." Sure enough, "job creation and economic growth" won with 35%. "The deficit and government spending" got 20%.

A Fox News poll also in early May got even more dramatic results. "Economy and jobs" topped the priority list with 47%, while "deficit, spending" garnered only 15%.

A CBS / NYT poll in early April found 27% prioritizing "jobs", 27% the "economy" and 5% prioritizing "budget deficit/national debt."

The only recent poll that gives the slightest hint of support for the Post's thesis is the USA Today / Gallup poll from late May (not even their newest). Participants were asked "How serious a threat to the future well-being of the United States do you consider each of the following." For "federal government debt", 40% said extremely serious, 39% very serious, and 15% somewhat serious. For "unemployment", 33% said extremely serious, 50% said very serious, and 15% said somewhat serious. If you use only the "extremely serious" numbers, you get 7% more for the debt. Greg Marx at CJR makes the case that this poll, nevermind its headline, should not be read as some sort of overwhelming evidence of a shifted public view.

And in fact a newer Gallup poll, from a week ago, asking "What do you think is the most important problem facing the country today?" finds the economy and jobs on top. "Economy in general" gets 28%, "Unemployment/Jobs" gets 21%, and "Federal budget deficit" gets 7%.

I don't know where this reporter got this information, but it is wrong and it requires a correction. The public is NOT more upset by the deficit than unemployment and to the extent they are upset about the deficit at all, it comes from the Big Lie that the deficit is responsible for the economic problems we face.

I have a fairly clear idea about why the powers that be are pushing this line, but why the press is doing it is another question. Just as they slanted their news and analysis in the run-up to the Iraq war, they are doing the same thing with respect to this deficit fetish. Read on...

There's little doubt why anyone at Fox would be pushing this. They're in the same camp with the Alan Simpson's of the world that would rather destroy Social Security than see taxes raised on the rich. And of course good little war mongers like Cheney and Kristol would rather see our social safety nets destroyed rather than one penny being taken away from the military industrial complex.



McConnell: Tiger Woods had better year than stimulus

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Economists say that the Democrats' stimulus package saved or created one to two million jobs but the Senate Minority Leader isn't about to admit it.

"The evidence is clear, Tiger Woods and John Edwards had a better year than the stimulus did," Sen. Mitch McConnell told Fox News' Chris Wallace Sunday.

McConnell did concede that there was some benefit from stimulus money. "The stimulus probably did save state government jobs," said McConnell.



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Peggy Noonan thinks that President Obama just discovered bipartisanship now that his poll numbers are going down. Obviously she hasn't paid an ounce of attention to how he's actually governed for the last year. And when confronted with the rank partisanship from the Republicans and even the Senate's newest member, Scott Brown, who said the stimulus bill hasn't created a single job, Noonan dismisses it as just rhetoric he used to get elected. And George Will blames the President for having "an aggressive agenda" for the Republicans' bad behavior.

TAPPER: George, the administration and the president has said specifically that he was hoping for some bipartisanship support for some of the small-business tax cuts and credits he's pushing. There's an elimination of a capital gains tax for investments in small businesses, a tax credit for hiring, hoping for Republican support. I have yet to hear one Republican voice, one level of support for any of that.

If there's not bipartisan support for tax cuts, is there support -- is there possibility for any support for anything bipartisan?

WILL: Well, I'll volunteer. I subscribe to Milton Friedman's view that any tax cut of any shape at any time for any reason is to be supported. So I think probably they'll get some support on this.

But he has a very aggressive agenda from which he has retreated not one bit. I think you'd agree with that. And so when he extends his hand, he says, "I ask only one thing of Republicans, and that is that you quit being Republicans," and they respectfully decline.

If you have an aggressive agenda, you're going to have to push it aggressively in a partisan manner.

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Can we get another stimulus package and ignore the Republicans and their tax cuts this time please? From This Week, Paul Krugman agrees with his fellow Nobel laureate, Joseph Stiglitz that there is a good chance that the economy is going to contract in the second half of 2010.

TAPPER: OK, we are getting close to short on time but I do want to ask you a question about the economy for 2010. Your fellow laureate, Joseph Stiglitz has said there's a significant chance the U.S. economy will contract in the second half of 2010. He's calling on the government to prepare a second stimulus. Do you think that's possible?

KRUGMAN: Yes, it's a reasonably high chance. I don't think it's more -- it's less than 50/50 odds, but you know, what we've got right now is a recovery that first of all is not showing up very much in jobs yet. It's being driven by fiscal stimulus which is going to fade out in the second half of next year and by inventory bounce. You know, production was low because companies were running on their inventories. They're stopping doing that so now you've got a bounce in the economy.

But that's also going to run out. So the things we know about are all going to be negative in the second half of next year. Now the financial markets, the last month, the financial markets have gotten really optimistic. You look at things like the term spread on bond rates. They suggest that the financial markets really think there is going to be a much more vigorous recovery. I don't see where it's supposed to come from, so the range is huge here. I would basically go with Joe Stiglitz. I'm really worried about the second half.

From Digby:

Boy I hope he's wrong about this.

[...]

Atrios agrees.

Tim Geithner, on the other hand, is confident that everything's coming up roses. Take your pick.



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Robert Reich reiterated what he wrote at his blog today to Ed Schultz--The President's Job's Initiative Doesn't Measure Up:

No president in modern times walks a tightrope as exquisitely as this one. His balance is a thing of beauty. But when it comes to this economy right now -- an economy fundamentally out of balance -- we need a federal government that moves boldly and swiftly to counter-balance the huge recessionary forces still at large.

States and cities, for example, are estimated to be $350 billion hole this year and next. They can't run deficits so they're wildly cutting spending, cutting jobs, cutting contracts, and raising taxes and fees. That's a huge anti-stimulus package roughly as big as the remaining direct spending in the old federal stimulus package. Which means, Obama's "new" stimulus, announced today, is about all we have, and it's not nearly enough.

[...]

There is no reason to tolerate this degree of misery. We know exactly what to do. The government has the fiscal tools to do it. Start by bailing out state and local governments (if Congress would prefer to call it a loan and require payback over the next five years, fine). Renew unemployment and COBRA benefits. Increase federal spending on infrastructure. If we have to, hire people directly. The package should be $400 billion over two years.

When Ed Schultz noted that the credit markets need to be loosened up for small businesses and that he thought the TARP money should be used for that and not only for government jobs, Reich responded:

Ed it is the right thing to do. I wish though when we bailed out the big banks, one of the reasons we bailed out the big banks was so they would turn around and provide credit for small businesses. Actually nothing like that happened. We bailed out the big banks and now we're bailing out small businesses.

Just one more of the many strings that should have been attached to that money. Of course the Republicans won't want to go along with any of it and scream more about the need for deficit reductions. Unless of course that interferes with tax cuts for the rich or military spending. Then the sky's the limit and deficits don't matter.



Rove Blames the Economy Melting Down on Fannie and Freddie

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First question, why is this man on my television screen instead of sitting in a jail cell somewhere? Karl Rove first claims that the stimulus package didn't work even though as Pat Garofalo over at the Think Progress' The Wonk Room noted:

...the Congressional Budget Office found that it has created or saved 600,000 to 1.6 million jobs, with plenty of punch still to come.

Rove is then asked by Greta Van Susteren if the Bush administration is responsible at all for the shape the economy is in. Rove tries to blame the economy melting down on Fannie and Freddie and on Chris Dodd and Barney Frank--it's all their fault! This is the same crap Rove was peddling in his Wall Street Journal column back in January. Barry Ritholtz does a nice job of debunking Rove's nonsense here--Karl Rove’s Factually Challenged Housing Revisionism.

VAN SUSTEREN: Here's the problem with what you suggest. I mean, that may be the suggestion for the economy, and I don't mean to suggest that decisions are made on politics. But to be sort of practical and realistic, the fact that there will be an election next November, if they cut the corporate tax, as you say, for big corporations, accelerate depreciation for small businesses, the first thing I would do as an opponent is saying, Well, he finally came around to the Republican thinking. And it took him a year or so or a year behind the ball on this in terms of the role of the recession. Plus, we've spent all this money in the stimulus package and we've got ourselves now in a huge spending situation. So you know, that solution may help the economy, but doesn't that make him more vulnerable politically?

ROVE: Well, it does say that he changes course. But I mean, look, it's not working. We were told that if we did nothing, unemployment would go to 8 percent. We did exactly what the president wanted, his $787 billion stimulus bill, and unemployment has gone to 10 percent. We've gone from a situation -- when he came into office, there were 142.1 million Americans working. Today there are 138.5 million Americans working. We did what he said and it has not gotten appreciably better.

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From Meet the Press, Joe Scarborough and Dan Senor think it's just fantastic that the GOP is running their "moderates" out of the party. Great game plan guys. Keep this up and maybe the GOP can get down to 15% instead of 20% of Americans that want to identify themselves as Republicans.

GREGORY: All right. Let--I've got about a minute left here. I want to talk politics here. Joe Scarborough, there seems to be, within the Republican Party, a litmus test going on. You had Sarah Palin on Facebook endorsing the conservative independent candidate in New York for that congressional seat in the 23rd district.

SCARBOROUGH: Mm-hmm.

GREGORY: Is this what's going on inside the Republican Party, this sort of run to see who can be the most conservative as a means of retaking power in 2010?

SCARBOROUGH: Well, it, it depends. How could any Republican, how could--let me strike that. How could any conservative be against the person that the Republican establishment in D.C. is for if they're conservatives? This woman, this Republican candidate, is for card check. She was for the Obama stimulus package. She has voted for taxes. I mean, she's been one of David Paterson's best allies. Why would a conservative support that Republican? This is, this is just one more example of how the Republican Party in Washington, D.C., is so disconnected from conservatives.

SENOR: You're seeing a revolt all over the place. In Joe's state, in Florida...

SCARBOROUGH: And, and I'm saying...

SENOR: ...Marco Rubio, who's running against Charlie Crist for the U.S. Senate...

SCARBOROUGH: Yeah.

GREGORY: Right.

SENOR: ...the Republican establishment in Washington rallied behind Charlie Crist because he was supposed to deliver the general election. Suddenly the polls in the Republican primary are closing, all the Republican primary conservative support is getting behind Marco Rubio, who's the start-up candidate.

SCARBOROUGH: And by the way, people love...

MAYER: This can't be good for the Republicans that have their own base being fractured, is it?

SCARBOROUGH: No. It's great for the Republican Party because...

SENOR: It's fantastic for the Republican Party.

SCARBOROUGH: ...when I, when I ran in 1994, the Republican Party on the state, national and local level tried to run against me a moderate Republican. And I'm not talking, I'm not talking abortion or gay marriage, I'm talking taxes and spending, small government. That's great to reinvigorate the base.

GREGORY: All right. And the president's out there for two big governor's races in New Jersey and Virginia this week, which a lot of people will see as some kind of referendum. We're going to leave it there.



Countdown's Worst Persons--O'Reilly, Kingston and Donahue

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Countdown's Worst Persons for Oct. 19, 2009 with winner Tom Donahue of the Chamber of Congress. Runners up Bill O'Reilly and Jack Kingston.